LONDON: Copper prices retreated on Monday as Chinese data suggesting poor demand prospects added to disappointment with economic stimulus measures from the top consumer, weighing on sentiment.
Benchmark copper on the London Metal Exchange (LME) traded 0.6% down at $9,541.5 a metric ton in official rings. It has mostly traded in a narrow $400 range over the past couple of weeks.
China’s industrial profits plunged in September, registering the steepest monthly decline of the year, owing to factors incuding weak demand and a sharp decline in producer prices. “It’s just the latest in a string of poor data from China. The authorities don’t seem to be able to stop the (decline),” one metals trader said.
Traders said a meeting of China’s top legislative body from Nov. 4-8 will be closely watched. On the technical front, strong support for copper comes in around $9,490 and $9,470, the 50-day and 100-day moving averages respectively.
Further clues on Chinese demand for industrial metals will come later this week from surveys of purchasing managers in the manufacturing sector, which has been contracting for many months.
Focus is also on the outcome of the Nov. 5 US Presidential election, which could bring widespread tariffs on imports if Donald Trump wins. Elsewhere, zinc came under further pressure after stocks in LME registered rose for a third consecutive day to 247,075 tons, easing concern about shortages. The deliveries are behind the narrowing premium for the cash contract over three-month zinc to about $18 a ton, down from last week’s peak above $58 a ton.
Three-month zinc was down 0.7% at $3,079 a ton but the metal is up 15% this year. “Zinc’s 2024 price rally has confirmed what those close to this industry have been saying for years, that zinc mine supply growth is at risk because there’s little in its project pipeline,” said Liberum analyst Tom Price. In other metals, aluminium slipped 1.1% to $2,646.50, lead was down 0.9% at $2,026.50, tin gained 0.7% to $31,550 and nickel lost 0.7% to $16,050.
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